Bloomberg News columnist William Pesek: Why doesn’t Apple just buy Sony (or Nintendo?)

“Oh, to be a fly on the wall at Sony Corp.’s Tokyo headquarters these days,” William Pesek blogs for Asbury Park Press. “After 2 1/2 years with Howard Stringer as the firm’s first foreign boss, Sony is now worth about a third of its market value at the start of the decade.”

“Adding insult to injury, Apple Inc. continues to hold the spotlight. It really is one of the great business stories of the past 50 years. Sony, the inventor of the Walkman, ceded its leadership in portable music players to Apple’s iPod and continues to lose ground,” Pesek writes. “It really makes you wonder why Apple Chief Executive Officer Steve Jobs doesn’t just buy Sony.”

“Apple’s owning Sony makes sense on many levels, though. Imagine the merger of two companies that boast many of the world’s top design experts. Imagine how our living rooms might look, how we might communicate, how we might work, and how we might view what’s possible in 10 years if Sony, which is strong on hardware, and Apple, which excels in software, got together,” Pesek writes.

MacDailyNews Take: Apple’s stronger on hardware than Sony right now. Sony cannot match the MacBook Air or the iPhone, iPod touch, or even the iPod classic and iPod nano. Sony used to be the miniaturization champion. Not anymore. Apple owns that crown now. Buying Sony for hardware prowess when Apple can already do better makes no sense.

Pesek continues, “Sony needs to restore the ‘cool factor’ it once had and Apple now owns. Apple needs Sony’s content — movies, music — to sell to its iPod and Apple TV enthusiasts. Why negotiate deals with record labels and film studios when you can own them?”

MacDailyNews Take: Now, Pesek’s making some sense. If Apple had Sony’s content, the other labels and majors would be loath to pull out of iTunes not only due to revenue losses (iTunes Store dominates the market), but also because Apple could retaliate and pull their valuable content from competitors’ outfits, too.

Pesek continues, “Apple probably wouldn’t mind controlling the Blu-Ray technology that analysts say offers lucrative revenue streams. Sony would give Apple the game franchise it lacks… And don’t forget Sony’s impressive stable of patents.”

“Of course, Jobs may have little interest in owning a company with so many fleas. Sony’s bureaucracy, scale and ingrained corporate culture could be a huge distraction for Apple, which has been successful offering a small number of products it makes very, very well. Also, Apple already is looking beyond today to tomorrow. Sony is more about today,” Pesek writes. “Some Sony product lines could be sold to help Apple pay for its acquisition. Yet how much debt would Apple be willing to take on to finance it? And given Sony’s baggage, an argument can be made that Nintendo Co. would be a better fit for Apple.”

More in the full article here.

[Thanks to MacDailyNews Reader “Marc” for the heads up.]

48 Comments

  1. Most mergers end up being bad for both parties, but lucrative for the senior managers involved. Why would Steve Jobs, who has repeatedly demonstrated that he cares little about personal enrichment, but immensely about building a personal kingdom, ever want to bring in a team of spoiled executives from some other company?

  2. Apple should stick to what they know best, and do it worldwide. What people need is more Apple store, iTunes store/movie rentals/Apple worldwide, iPhones/iPod Touch/iTablet + SDK worldwide!!!! And perhaps an All-in-one iMac Mini for $700 with lower specs…

    This is where they should go. The rest is a waste of time for them.

  3. ” . . . but lucrative for the senior managers involved.”

    It’s also terrific for teams of lawyers. Many of them have to be fitted with muzzles and choke collars to prevent them from seriously injuring someone.

  4. It would be like Toyota buying Ford.

    Toyota as better hardware, better engineering, better design and a non-union, highly motivated workforce. Why take on Ford’s problems? Problems that are driving Ford towards the bankruptcy cliff. It would be sheer folly for Toyota to make that mistake. Their management is too smart to make that mistake. Besides, they already turned down GM. What makes Ford better than GM?

    Similarly Apple is not going to take on Sony’s problems with no upside.

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